Sorry, California. No One Wants Your Cheap Bulk Wine Anymore.
Amid reports of a "grape apocalypse," a reckoning in wine country.
Today, over at The New Wine Review, I’ve published my latest commentary the American wine industry’s crisis — which is either “existential” or “apocalyptic” or “a correction” depending on who you talk to.
As Everyday Drinking readers well know, I’ve been saying for a few years that the American wine industry’s reliance on “starter” or “entry-level” wines—ie. mass-market brands based on cheap, poor-quality bulk wines—will be its downfall.
So has anyone really been surprised by the unrelenting string of bad news from California wine country this spring and summer? Most notably, in May, the San Francisco Chronicle declared “California Wine Is in Serious Trouble,” reporting that wine consumption had dropped nearly nine percent in 2023. One well-known winemaker told the Chronicle, “A lot of brands are dead, but they don’t even know it right now.” Just this week, the newspaper also reported that much of this year’s upcoming California wine harvest could go to waste, with wine growers unable to sell their grapes.
Amplifying that message in Wine-Searcher yesterday, W. Blake Gray gravely suggests that “California Faces the Grape Apocalypse.” Gray notes that Gallo, the largest winery in the U.S., has begun to cut back its vineyard land, particularly Pinot Noir and Chardonnay in Sonoma County. “If Gallo, easily the best in the business at selling wine, thinks it can’t sell Sonoma County Pinot and Chardonnay, that’s a terrible sign for the near future of the U.S. wine market,” he writes.
Over at The New Wine Review, I connect the dots between this current bulk wine crisis and how it was created by self-inflicted by a greedy, short-sighted American wine industry:
American consumers have been telling us, for years, that they do not want what the industry is selling at $11.99. At that price, there are dozens of other beverage options.
Study after study shows that young people are drinking less but spending more. Several show that millennials already spend more on wine, per bottle, than boomers do. According to the Wine Market Council, the sweet spot for prices these days is $20 to $25—and sales in this price range are up about two percent this year. (Yes. You read that correctly.) Sauvignon Blanc (as we reported this spring) is the most popular grape variety in the U.S., and its sales over $25 are up nearly seven percent. Overall, while volume is down, the amount of dollars spent on wine is up 46 percent since 2018.
But the industry remains trapped in its model of selling flashy brands that package bulk wine. As the Chronicle stated in May: “This is an industry that grew complacent, so accustomed to its baby boomer-dominant customer base and its old way of doing things that it hasn’t been forced to meaningfully innovate in a long time.”
It’s an industry that largely scoffed at natural wine, despite its popularity among younger drinkers. It’s ignored the fact that younger drinkers want fewer additives, more sustainable practices, ethical production, and transparency. California growers have even ignored the worldwide preference of white wines over red wines. In Gray’s Wine-Searcher piece, he notes that California growers have planted nearly twice as many red grapes over the past decade, even though white grapes sell better. This is an industry that’s completely lost sight of the consumer.
Please take a look at the full article if you have a moment today.
good article! Now that I think about it, I can't remember the last time I bought a red under $40 unless I was making sangria (I'm not a boomer). Some nice summery rose and whites, though! King Maui Sauvignon Blanc is really good and like $12
Fantastic piece, Jason!